Md. Shamsad Alam, Kolkata V. ITO, Ward-53(1), Kolkata, Kolkata

ITA 2124/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1870 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 20-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Keywords: Depreciation; Wrong claim; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI N.V. VASUDEVAN, JM & DR. A.L.SAINI, AM ./ ITA NO.2124/KOL/2014 ( / ASSESSMENT YEAR :2009-2010) MD. SHAMSAD ALAM, (PROPRIETOR OF : M/S M.S.DRUM SUPPLIERS), 25/6/F, AM GHOSH ROAD, BUDGE BUDGE, 24 PARGANAS (S), KOLKATA-700137 VS. THE ITO, WARD-53(1), 2, GARIAHAT ROAD (S) KOLKATA-700068 ./ ./PAN/GIR NO. : AFTPA 5230 L ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI NIRMAL KAUSHIK, FCA /REVENUE BY : SHRI SAURABH KUMAR ADDL.CIT(DR) / DATE OF HEARING : 11/04/2017 /DATE OF PRONOUNCEMENT 19/04/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAI NING TO THE ASSESSMENT YEAR 2009-2010, IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXIII, KO LKATA, IN APPEAL NO.49/CIT(A)-XXXIII/ITO WARD53(1)/KOL/12-13, DATED 17.09.2014, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESS ING OFFICER U/S.143(3) OF THE INCOME TAX ACT 1961, (HEREINAFTER REFERRED T O AS THE ACT), DATED 27/12/2011. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-1 0 ON 30.09.2009 DISCLOSING TOTAL INCOME OF RS.1,93,600/-. THE RETUR N OF ASSESSEE WAS PROCESSED U/S.143(1) OF THE I.T. ACT. LATER ON, THE ASSESSEES CASE WAS SELECTED UNDER SCRUTINY U/S.143(3) OF THE ACT AND T HE AO COMPLETED THE ITA NO.2124/KOL/2014 MD. SHAMSAD ALAM 2 ASSESSMENT BY MAKING ADDITION OF RS.1,30,125/- ON ACCOUNT OF DEPRECIATION ON TANKER, RS.1,33,737/-ON ACCOUNT OF DISCREPANCIES IN LOAN & ADVANCES, RS.2,87,105/-ON ACCOUNT OF INTEREST PAI D FOR TANKER PURCHASE, RS.1,23,876/-ON ACCOUNT OF TANKER HIRE CH ARGES, AND RS.51,650/- ON ACCOUNT OF CAR MAINTENANCE. WHILE MA KING THE ASSESSMENT, THE AO OBSERVED THAT ASSESSEE HAS CLAIM ED CAR MAINTENANCE EXPENSES WHEREAS THERE WAS NO MOTOR CAR IN THE ASSET SIDE OF THE BALANCE SHEET OF THE ASSESSEE. THE AO ALSO O BSERVED SOME BOGUS EXPENSES CLAIMED BY THE ASSESSEE THEREFORE, THE AO LEVIED THE PENALTY U/S 271(1) (C ) OF THE ACT. 3. NOT BEING SATISFIED WITH THE PENALTY ORDER PASS ED BY THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD CIT(A), WHO HAS CONFIRMED THE PENALTY IMPOSED BY AO UNDER SECTION 271(1) (C) OF T HE ACT. THE LD CIT(A) OBSERVED THAT ASSESSEE WAS NOT GUILTY OF FURNISHING ANY INACCURATE PARTICULARS OF INCOME ON CONCEALING INCOME IN SO FA R AS THE ADDITIONS ON ACCOUNT OF DISCREPANCY OF RS.1,33,737/- IN THE LOAN AMOUNT, INTEREST OF RS.2,87,105/- NOT DEBITED TO THE PROFIT AND LOSS AC COUNT AND ADDITION OF RS. 1,30,161/- ON ACCOUNT OF EXPENDITURE TREATED AS REVENUE EXPENDITURE BY THE ASSESSING OFFICER ARE CONCERNED. THEREFORE L D CIT(A) DIRECTED THE AO TO DELETE THE PENALTY U/S 271(1) (C ) OF THE ACT , IN RESPECT OF THESE ADDITIONS. HOWEVER, THE LD CIT(A) CONFIRMED THE PEN ALTY IN RESPECT OF ADDITIONS OF RS.1,23,876/- ON ACCOUNT OF UNDERSTATE MENT OF TANKER HIRE CHARGES AND RS. 51,650 ON ACCOUNT OF BOGUS CLAIM OF CAR MAINTENANCE EXPENSES. ITA NO.2124/KOL/2014 MD. SHAMSAD ALAM 3 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- 1. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING PENALTY UNDER SECTION 271 (1) (C ) IMPOSED BY LD. INCOME TAX OFFI CER IN RESPECT OF ADDITION OF RS.1,23,876/-UNDERSTATEMENT OF TANKER H IRE CHARGES AND RS.51,650/- CLAIM OF CAR MAINTENANCE EXPENSES. 5. LD. AR FOR THE ASSESSEE HAS SUBMITTED, BEFORE US , STATING THAT AT THE OUT SET NOTICE ISSUED BY THE ASSESSING OFFICER U/S 271(1) (C ) OF THE ACT IS DEFECTIVE. THE SAID NOTICE DOES NOT SPEAK AB OUT ANY SPECIFIC CHARGE FOR WHICH THE PENALTY ON THE ASSESSEE IS TO BE LEVI ED. IT IS NOT CLEAR AS TO WHETHER THE ASSESSEE IS BEING PENALIZED FOR THE CON CEALMENT OF INCOME OR FOR THE FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER DID NOT STRIKE OFF THE IRRELEVANT PORTION I N THE NOTICE, THEREFORE IT IS NOT CLEAR FOR WHICH PARTICULAR DEFAULT THE ASSESSEE IS BEING PENALIZED. THE LD AR FOR THE ASSESSEE HAS RELIED ON THE JUDGMENT O F HON`BLE KARANATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNI NG MILLS 359 ITR 565 (KARNATAKA), WHEREIN IT WAS HELD THAT NOTICE UNDER SECTION 271(1) (C ) OF THE ACT, SHOULD SPECIFICALLY STATE AS TO WHETHER PE NALTY IS BEING IMPOSED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCUR ATE PARTICULARS OF INCOME AND AS WAS FOLLOWED BY THE KOLKATA TRIBUNAL IN THE CASE OF SUVAPRASANANA BHATTACHARYA VS. ACIT, ITA NO. 1303/ K/2010, DATED 6.11.2015, KOLKATA. THEREFORE, PENALTY U/S 271 (1) (C ) SHOULD NOT BE LEVIED. ITA NO.2124/KOL/2014 MD. SHAMSAD ALAM 4 6. LD. DR FOR THE REVENUE HAS PRIMARILY RELIED ON THE FINDINGS OF THE AO, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 7. HAVING HEARD THE SUBMISSIONS OF LD AR FOR THE ASSES SEE AND PERUSED THE MATERIAL AVAILABLE ON RECORDS, WE ARE O F THE VIEW THAT NOTICE ISSUED BY THE AO UNDER SECTION 271(1) (C ) OF THE A CT IS DEFECTIVE. THE NOTICE UNDER SECTION 271 (1) (C ) OF THE ACT, SHOUL D SPECIFICALLY STATE AS TO WHETHER PENALTY IS BEING IMPOSED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THERE IS NO ANY SPECIFIC CHARGE ON THE ASSESSEE IN THE CASE UNDER CONSIDERAT ION THEREFORE THE PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE LD C IT(A) NEEDS TO BE DELETED. ACCORDINGLY, WE DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE, IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19/04 /2017. SD/ - (N.V. VASUDEVAN) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 19/04/2017 & ()* /PRAKASH MISHRA ,SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT. REGISTRAR) & ' , / ITAT, KOLKATA 1. / THE APPELLANT- MD. SHAMSAD ALAM 2. / THE RESPONDENT.-ITO, WD-53(1), KOLKATA 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//